News

Medigene reports results for fiscal year 2012 and provides 2013 outlook

Press and analysts telephone conference call with webcast (in English) today, March 22, 2013, 10:00 a.m. (CET)

  • Revenue from continued operations improved by 35%  

  • Revenue from Veregen® increased by 47% 

  • EBITDA from continued operations improved by 14% 

  • Cash reach at least until the end of 2014 

Martinsried/Munich, March 22, 2013. Medigene AG (Frankfurt, Prime Standard; MDG) reports its fiscal year 2012 financial results and progress of its projects. The company increased total revenue from continued operations by 35% to EUR 6.3 million (2011: EUR 4.7 million). Revenue from Veregen® increased by 47% to EUR 3.4 million (2011: EUR 2.3 million). Moreover, Medigene reduced its loss on EBITDA basis from continued operations by 14% to EUR -9.4 million (2011: EUR -11.0 million).

Medigene's combined revenue from continued and discontinued operations totaled EUR 11.3 million (2011: EUR 32.5 million), the total EBITDA amounted to EUR -4.4 million (2011: EUR 11.2 million), and the net loss for the year was EUR -9.9 million (2011: EUR 6.3 million). This means that the Company's 2012 guidance published at the beginning of 2012 (revenue exceeding EUR 10 million, loss on EBITDA basis in the middle single-digit million range) was not only achieved, but surpassed.

Key events in 2012:

  • Veregen®:  

 

  • Market launch in Spain and Switzerland 

  • Market approval in 17 European countries and Israel 

  • Marketing partnership agreements concluded for the Nordic countries,Eastern Europe, Russia, the remaining CIS countries, and Turkey  

 

  • EndoTAG®-1: 

 

  • Development and marketing partnership established with SynCore for Asia   

  • US patent granted with a regular term through 2029  

  • Investigator Initiated Trial (IIT) in an additional breast cancer indication conducted  

 

  • RhuDex®:  

 

  • Clinical formulation trial successfully completed 

  • Further clinical development plan published: Phase II clinical trial in primary biliary cirrhosis (PBC) planned 

 

  • Eligard®:  

 

  • Final milestone payment of EUR 5 million received  

  • Transfer of the 2% royalty share against payment of EUR 14 million  

 

  • Change in the Executive Board  

 

  • Peter Llewellyn-Davies appointed as Chief Financial Officer 

Dr. Frank Mathias, Chief Executive Officer of Medigene AG, comments: "2012 has been a successful year, in which we made progress in the marketing of our approved product, as well as with our drug pipeline. Veregen® has gained market share, and we have also engaged an important partner for EndoTAG®-1. With the recently announced expansion of the clinical trial plan for RhuDex®, we are aiming to enhance the value of this drug candidate.  We look forward to launching Veregen® in new markets in cooperation with our partners and successfully advancing our drug candidates."

Peter Llewellyn-Davies, Chief Financial Officer of Medigene AG, explains: "Medigene successfully increased revenue in 2012, stabilized expenses, improved EBITDA from continued operations, and increased the cash position. Based on the sound financial development in 2012 and continuously increasing revenue, we will diligently work on the implementation of our marketing and development plans. We are also exploring options for the expansion of our pipeline."

Outlook:

Financial outlook for 2013
In 2013, Medigene expects increasing total revenue to about EUR 7 - 8 million, compared to EUR 6 million in 2012. The projected income in 2013 includes Veregen® revenue of EUR 4.5 - 5.5 million (2012: EUR 3.4 million), as well as non-cash income totaling EUR 2.5 million (2012: EUR 1.9 million) from the Eligard® deal concluded in 2012.

At the same time Medigene expects increasing R&D expenses for 2013, as well as a loss on EBITDA basis between EUR 9 - 11 million, compared to EUR 9 million from continued operations in 2012. Since discontinued operations of Medigene were ceased at the end of 2012, the company will only report continued operations starting in 2013.

Based on current business planning and on the related operating scenarios, the company's management assumes that the funding of the company is secured at least until the end of 2014.

Eligard®
Due to the transfer of future royalty payments for Eligard®, Medigene will post other revenue of EUR 208 thousand per month in the future, as well as monthly interest expenses. Both are non-cash items.

Veregen®
Medigene expects market approval and market launch of Veregen® in numerous countries. For the global commercialization of Veregen®, Medigene is planning to conclude additional partnership agreements. In 2013, Medigene also expects a further increase of Veregen® sales with revenue for Medigene totaling between EUR 4.5 - 5.5 million.

EndoTAG®-1
The final data of the IIT study for the neoadjuvant treatment of patients with HER2-negative breast cancer, conducted by Prof. Awada, Institut Jules Bordet, are expected in the first half of 2013, and will presumably be presented at a scientific conference in the course of the year.

Medigene plans a pivotal global phase III trial of EndoTAG®-1 in triple-negative breast cancer (TNBC), with the aim of achieving market approvals worldwide. Under the terms of the exclusive license agreement for the rights to EndoTAG®-1 in Asia, Australia, and New Zealand, concluded in 2012, SynCore will bear a significant portion of the costs of the planned phase III trial. For the remaining part of the trial expenses, Medigene is seeking additional partners.  

RhuDex®
Medigene is planning to conduct a phase II clinical trial in PBC, in order to confirm the mode of action and the overall clinical profile of RhuDex® in autoimmune diseases. Subject to the successful completion of the necessary preparatory work and the approval of the trial by the regulatory authorities, this phase II trial is scheduled to start no later than in the first half of 2014.

AAVLP vaccine technology
Further preclinical studies will be conducted with Medigene's proprietary Adeno-associated virus-like particles (AAVLP) vaccine technology. AAVLP offers the potential as prophylactic and therapeutic vaccines against cancer and infections. The project is available for partnerships and licensing.

Consolidated income statement (abbreviated)

 

In EUR thousand 2012 2011 Change
Total revenue 6,284 4,656 35%
     thereof Veregen(R) 3,387 2,305 47%
Cost of sales -1,250 -953 31%
Gross profit 5,034 3,703 36%
Selling, general and administrative expenses -7,909 -8,103 -2%
Research and development expenses -7,399 -11,254 -34%
Other expenses (deconsolidation) -6,166 0 -
Operating result from continued operations -16,440 -15,654 5%
Result before tax from continued operations -14,795 -15,474 -4%
Taxes -82 1,241 -
Result from continued operations -14,877 -14,233 5%
Revenue from discontinued operations 5,032 27,828 -82%
Result from discontinued operations 5,018 20,514 -76%
Net result for the year -9,859 6,281 -
EBITDA* from continued operations -9,427 -10,979 -14%
EBITDA* total -4,409 11,180 -

 

 *Definition see below

Detailed financial results 2012:

Product sales and other income
In 2012, Medigene increased total revenue by 35% to EUR 6,284 thousand (2011: EUR 4,656 thousand) and achieved revenue from discontinued operations totaling EUR 5,032 thousand (2011: EUR 27,828 thousand).

Revenue from continued operations was generated from the commercialization of Veregen® in the USA, Germany, Austria, Switzerland and Spain amounting to EUR 2,774 thousand (2011: EUR 2,050 thousand), as well as from milestone payments for Veregen® of EUR 610 thousand (2011: EUR 250 thousand). Other operating income amounted to EUR 2,900 thousand (2011: EUR 2,356 thousand). This income essentially comprises the 2% royalty share from Eligard® net sales from Astellas totaling EUR 613 thousand for the first quarter of 2012 and since April 1, 2012, from the transfer of the future cash flows from this revenue share to Cowen, which amounts to EUR 208 thousand per month. This revenue is a non-cash item and will be recognized as income pro rata over the term of the patent of approximately ten years. The related financial liability will be amortized, taking into account the non-cash interest expense. In the first quarter of 2012, Medigene also received a compensation payment from a service provider for costs incurred amounting to EUR 390 thousand.

Revenue from discontinued operations is mainly comprised the final milestone payment of EUR 5,000 thousand (2011: EUR 20,000 thousand) for the sale of the Eligard® rights to Astellas. In the previous year's period, in addition to the milestone payments received, the Eligard® product sales achieved and license payments received through February 2011 were also reported under this item.

Selling, general and administrative expenses

Selling, general and administrative expenses from continued operations decreased year-on-year from EUR 8,103 thousand (2011) to EUR 7,909 thousand (2012). This amount consists of EUR 2,271 thousand in selling expenses (2011: EUR 2,272 thousand) and EUR 5,638 thousand in general administrative expenses (2011: EUR 5,831 thousand). Selling expenses from discontinued operations totaled EUR 14 thousand in the reporting period (2011: EUR 343 thousand).

Research & development expenses
Total expenses for research and development (R&D) were down 34% to EUR 7,399 thousand (2011: EUR 11,254 thousand). A large part of the cost for research and development consisted of expenses for clinical and preclinical development as well as regulatory expenses and consultancy fees. At the same time, personnel expenses and rent were down. In the previous year's period, the write-down of an early-stage research project that Medigene ceased, amounting to EUR 3,827 thousand, was posted as an expense.

Other expenses
Other expenses of EUR 6,166 thousand were incurred in connection with the deconsolidation of Medigene Ltd. As part of this, other reserves included under shareholders' equity were largely written off. Although this posting with no effect on shareholders' equity is reported in the income statement, it is a non-cash item and has no impact on EBITDA.

EBITDA
Medigene AG's EBITDA is derived from net profit/loss for the year excluding taxes, the financial result, depreciation, amortization and impairment, as well as other expenses (e.g., in 2012, from the deconsolidation of Medigene Ltd). In 2012, Medigene's loss based on EBITDA amounted to EUR -4,409 thousand (2011: EBITDA profit of EUR 11,180 thousand). The loss from continued operations amounted to EUR -9,427 thousand in the reporting period ended (2011: EUR -10,979 thousand).

Net result for the year
In the reporting period, the net loss for the year amounted to EUR -9,859 thousand compared with a profit for the year of EUR 6,281 thousand in the previous year. The result from continued operations totaled EUR -14,877 thousand (2011: EUR -14,233 thousand).

Cash and cash equivalents and cash flow from operating activities
Cash and cash equivalents were up by EUR 7,332 thousand in the 2012 reporting year (2011: EUR 8,287 thousand) and the cash position was EUR 20,113 thousand at the end of 2012 (2011: EUR 12,811 thousand).

Net cash used by operating activities amounted to EUR -6,507 thousand in the reporting period (2011: net cash inflow of EUR 6,864 thousand) and comprised the final milestone payment of EUR 5 million (2011: EUR 15 million) from the sale of the Eligard® rights to Astellas.

The net cash outflow for investing activities in 2012 totalled EUR -255 thousand (2011: net cash inflow of EUR 1,423 thousand). In the previous year, Medigene earned EUR 1,774 thousand from the sale of shares in Immunocore Ltd.

The net cash inflow from financing activities amounted to EUR 14,094 thousand in the reporting period (2011: EUR 0). This item represents the payments received for the financial liability to Cowen relating to the transfer of the 2% share of revenue from Eligard® net sales.

Average monthly cash flow from operating activities
The consolidated statement of cash flows for 2012 shows an average monthly net cash usage for operating activities of EUR -542 thousand (2011: net cash inflow of EUR 572 thousand). Net of the above-mentioned non-recurring items, the monthly cash usage for 2012 was an average of EUR -959 thousand (2011: EUR -826 thousand).

Press and analysts' conference call:
A press and analysts conference call (in English) will be held today at 10:00 a.m. CET and will be webcast live. Please access the synchronized presentation slides and a recording via Medigene's website, www.medigene.com.

The detailed Annual Report is available at www.medigene.com/reports

Medigene AG is a publicly listed (Frankfurt: MDG, prime standard) biotechnology company headquartered near Munich, Germany. Medigene focuses on clinical research and development of novel drugs against cancer and autoimmune diseases. Medigene was the first German biotech company to have revenues from marketed products, which are distributed by partner companies. It has two drug candidates in clinical trials, EndoTAG®-1 and RhuDex®; and is developing an innovative vaccine technology.

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This press release contains forward-looking statements representing the opinion of Medigene as of the date of this release. The actual results achieved by Medigene may differ significantly from the forward-looking statements made herein. Medigene is not bound to update any of these forward-looking statements. Medigene®, EndoTAG®, RhuDex® and Veregen® are registered trademarks of Medigene AG. Eligard® is a trademark of Tolmar Therapeutics, Inc. These trademarks may be owned or licensed in select locations only.

Contact Medigene AG
Julia Hofmann, Claudia Burmester
Investor & Public Relations
Tel.: +49 - 89 - 20 00 33 - 33 01
Email: investor@medigene.com

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